In this piece, we will look at the best semiconductor equipment stocks to buy according to hedge funds.
While most focus in the semiconductor industry is on the Taiwan Semiconductor Manufacturing Limited (NYSE:TSM), the complexity of chip fabrication means a myriad of firms are indispensable when it comes to production. TSMC held a commanding 70.2% market share of the global foundry market in the second quarter, according to data from market research firm TrendForce.
The Taiwanese firm’s dominance in the semiconductor fabrication market is a characteristic of the broader industry. This characteristic also applies to the semiconductor equipment sector. TSMC, and other chip manufacturers rely on lithography equipment from the Dutch firm ASML Holding N.V. (NASDAQ:ASML). Lithography is one part of the complex chip manufacturing process, with some other activities being etching, deposition, and doping. However, since lithography determines how small the circuits on a chip can be, it is the most crucial and creates high barriers to entry. As a result, ASML holds a 100% share of the global extreme ultraviolet lithography market, according to DBS Bank Singapore.
The importance and the geography of the semiconductor equipment industry were discussed by Vikas Pershad of M&G Investments in an appearance on CNBC in July. Pershad discussed the industry and commented that “If you look at semiconductor production equipment companies in North Asia, Japan and South Korea in particular, we are more underweight now than we have been in a long time. A part of it is that many of these companies have rallied. . . SPE companies we are underweight there. The reason for that is the increased competition from China.”
Our Methodology
To identify the best semiconductor equipment stocks to buy, we used the Finviz stock screener to sift out the 20 most valuable US-listed semiconductor equipment stocks. The stocks were ranked by the number of hedge funds that had owned a stake in them during Q2 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
13 Best Semiconductor Equipment Stocks to Buy According to Hedge Funds
13. Photronics, Inc. (NASDAQ:PLAB)
Number of Hedge Fund Holders In Q2 2025: 25
Photronics, Inc. (NASDAQ:PLAB) is a specialty semiconductor manufacturing equipment firm that primarily makes and sells photomasks. Photomasks are used by chip manufacturers to transfer a chip’s design onto the wafer by blocking light in specific areas.
Photronics, Inc. (NASDAQ:PLAB)’s shares have lost 9.6% year to date. One dip came after the firm reported its latest earnings report in August. The results saw Photronics, Inc. (NASDAQ:PLAB) report $210 million in revenue and $0.51 in earnings per share. The revenue marked a 0.3% annual drop while the earnings per share were flat.
However, while Photronics, Inc. (NASDAQ:PLAB)’s shares have struggled, the firm might be making inroads into more markets. A report from the Korean publication The Elec claimed in late September that Samsung had outsourced its lower-end masks to the firm’s subsidiary, while Photronics, Inc. (NASDAQ:PLAB) also has a joint research and development agreement with IBM to develop photomasks for 5-nanometer and 7-nanometer manufacturing processes.
12. Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC)
Number of Hedge Fund Holders In Q2 2025: 28
Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC)’s chip manufacturing equipment serves in the final assembly of a chip, which sees manufacturers attach balls to the package to enable it to transfer data and communicate with other parts of a computer. It is one of the oldest firms of its kind and was set up in 1951.
Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC)’s shares have lost 18% year-to-date. It’s been relatively quiet on the news front for the firm, except for some executive changes. On October 14th, Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) announced that its Executive Vice President and General Manager, Chan Ping Chong, would retire on December 1st and its Vice Presidents and General Managers of Wire Bonding and Advanced Solutions, Ivy Qin and John Molnar, would report to CEO Fusen Chen.
Just two weeks later, Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) announced that Mr. Chen would leave his role due to health reasons and be replaced by an interim CEO.
Hedge Fund Resource Center